Correlation Between Definitive Healthcare and Icecure Medical
Can any of the company-specific risk be diversified away by investing in both Definitive Healthcare and Icecure Medical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Definitive Healthcare and Icecure Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Definitive Healthcare Corp and Icecure Medical, you can compare the effects of market volatilities on Definitive Healthcare and Icecure Medical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Definitive Healthcare with a short position of Icecure Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Definitive Healthcare and Icecure Medical.
Diversification Opportunities for Definitive Healthcare and Icecure Medical
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Definitive and Icecure is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Definitive Healthcare Corp and Icecure Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icecure Medical and Definitive Healthcare is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Definitive Healthcare Corp are associated (or correlated) with Icecure Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icecure Medical has no effect on the direction of Definitive Healthcare i.e., Definitive Healthcare and Icecure Medical go up and down completely randomly.
Pair Corralation between Definitive Healthcare and Icecure Medical
Allowing for the 90-day total investment horizon Definitive Healthcare Corp is expected to under-perform the Icecure Medical. But the stock apears to be less risky and, when comparing its historical volatility, Definitive Healthcare Corp is 2.79 times less risky than Icecure Medical. The stock trades about -0.04 of its potential returns per unit of risk. The Icecure Medical is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 103.00 in Icecure Medical on August 26, 2024 and sell it today you would lose (32.00) from holding Icecure Medical or give up 31.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Definitive Healthcare Corp vs. Icecure Medical
Performance |
| Timeline |
| Definitive Healthcare |
| Icecure Medical |
Definitive Healthcare and Icecure Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Definitive Healthcare and Icecure Medical
The main advantage of trading using opposite Definitive Healthcare and Icecure Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Definitive Healthcare position performs unexpectedly, Icecure Medical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Icecure Medical will offset losses from the drop in Icecure Medical's long position.| Definitive Healthcare vs. HealthStream | Definitive Healthcare vs. National Research Corp | Definitive Healthcare vs. Forian Inc | Definitive Healthcare vs. HealthEquity |
| Icecure Medical vs. BrainsWay | Icecure Medical vs. SurModics | Icecure Medical vs. STRATA Skin Sciences | Icecure Medical vs. Tenon Medical |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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